JANUARY 2015 Visit us now online at www.NJPhysician.org
Medicare Initiative is Paying Off in Terms of Cost and Care, Particularly in New Jersey Hackensack University Health Network, Seton Hall to Create Medical School Use of BCBSNJ’s “Patient Centered” Programs Up More Than 50%
Published by Montdor Medical Media, LLC Co-Publisher and Managing Editors Iris and Michael Goldberg Contributing Writers Tom Bergeron Beth Fitzgerald Layout and Design - B&L Printing, Co. Inc. New Jersey Physician is published monthly by Montdor Medical Media, LLC., PO Box 257 Livingston NJ 07039 Tel: 973.994.0068 Fax: 973.994.2063 For Information on Advertising in New Jersey Physician, please contact Iris Goldberg at 973.994.0068 or at igoldberg@NJPhysician.org Send Press Releases and all other information related to this publication to igoldberg@NJPhysician.org Although every precaution is taken to ensure accuracy of published materials, New Jersey Physician cannot be held responsible for opinions expressed or facts supplied by its authors. All rights reserved, Reproduction in whole or in part without written permission is prohibited. No part of this publication may be reproduced or transmitted in any form or by any means without the written permission from Montdor Medical Media. Copyright 2010. Subscription rates: $48.00 per year $6.95 per issue Advertising rates on request New Jersey Physician magazine is an independent publication for the medical community of our state and is not a publication of NJ Physicians Association
Contents
Medicare Initiative is Paying Off in Terms of Cost and Care, Particularly in New Jersey
6
CONTENTS
8 Hackensack University Health Network, Seton Hall To Create Medical School on Former Roche Campus
10 Use Of Horizon BCBSNJ’s ‘Patient-Centered’ Programs Up More Than 50 Percent
11 Survey Paints Bleak Picture For Physicians Amid Health Care Changes 13 More N.J. Health Care Organizations To Start Acos, Get Chance at Medicare Incentives
14 Atlanticare Expands Network Of Outpatient Surgery Centers 16 N.J. Hospitals Contribute $20B To State’s Economy, Report Says 17 Jersey Shore Hospital Names New President, A Familiar Face 19 Barnabas Health Purchases Jersey City-Owned Property for $24M 20 Cigna Buying Qualcare; Catino, Who Will Remain Ceo, Explains Deal 23 Jersey City Hospital on Verge of Exiting Horizon BCBSNJ Network 4 New Jersey Physician
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Cover Story
Medicare initiative is paying off in terms of cost and care, particularly in New Jersey By Beth Fitzgerald
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ew Jersey is among seven states nationwide in which Medicare is partnering with health insurance companies in a unique, four-year pilot program aimed at improving the delivery of primary medical care in America. And it’s starting to show results: Medicare announced that the Comprehensive Primary Care initiative is having a positive impact on both the cost and the quality of care. The Centers for Medicare & Medicaid Services reported that, in the CPC’s first year ended Sept. 30, 2013, hospital admissions decreased 2 percent and emergency department visits 3 percent. Overall, the entire program about broke even on cost: medical spending declined nearly enough to offset the funds Medicare provides to primary care practices to enable them to deliver better-coordinated care to their patients. In New Jersey, however, the program did better than break-even. An analysis of the program’s results by the Princeton research firm Mathematica found that both New Jersey and Oklahoma actually saved Medicare money in the first year of the four-year program, which runs through the end of 2016. In New Jersey, CPC achieved a 3 percent reduction in Medicare spending, after accounting for the additional funds Medicare provided to primary care practices to enable them to move toward providing higher quality, more comprehensive care to their patients. If those extra funds are excluded, New Jersey saved Medicare 5 percent. CPC in New Jersey is a collaboration between Medicare and four health plans: Horizon Blue Cross Blue Shield of New Jersey, AmeriHealth New Jersey, UnitedHealthcare and Amerigroup. All five make “care coordination” payments to the 68 physician practices in the program, and the money is used to improve the care that all of the patients receive. The payments fund changes the practices are making in how they deliver care, covering new costs like hiring nurses to coordinate the care patients receive and to keep tabs on high-risk patients, such as those with diabetes and heart disease. In New Jersey, more than 327,000 patients are served by the 68 practices and 286 physicians in the program. Of those, just over 48,600 are Medicare and Medicaid beneficiaries, while the rest primarily belong to commercial health insurance plans. The one-year results just announced by CMS are only for the Medicare patients in the CPC. Horizon is the program’s largest commercial payer, accounting for about half of the non-Medicare patients in the CPC. Dr. Steven R. Peskin, senior medical director for clinical innovations at Horizon, said the positive results reported by CPC echo the success Horizon is seeing in its network of patient-centered practices, the largest such network in New Jersey, with 6,000 physicians. Most of the practices enrolled in the CPC also are in Horizon’s patient-centered network. Medicare reported that, in New Jersey, CPC saw a 4 percent improvement in diabetes compliance; 4 percent fewer emergency room visits; and 6 percent fewer hospitals readmissions. Horizon, in a study of the impact of its patient-centered program during 2013, found a 4 percent lower rate of ER use; 2 percent fewer hospital admissions; 4 percent lower cost of care for diabetic patients; and 4 percent lower total cost of care. Horizon began in 2010 to help New Jersey primary care practices transition to “patient-centered medical homes” that coordinate patient care. Additional payments by Horizon to these practices are helping cover the cost to hire nurses “who work inside these practices to effect positive change with chronic condition management and developing care plans for high risk individuals,” Peskin said. Peskin said, “We have folks that are out every day across the state looking at how practices are organized.”
6 New Jersey Physician
Changes being made include things like improving access to same-day appointments; making sure the right patients get colon cancer screenings and mammograms; and pneumonia vaccinations. “We’re very much involved in a consultative and collaborative way with our practices around the state,” Peskin said. CMS officials explained that one reason New Jersey was chosen for the CPC pilot program is that Horizon, a commercial insurer with a large market share, already had a major initiative underway to transform primary care practices into patientcentered practices: “Certainly Horizon’s was by far the biggest initiative that had been going on in New Jersey.” CMS also said that it’s unusual for a new, innovative program like CPC to achieve positive results in its first year. The New Jersey Academy of Family Physicians is a partner in CPC, working with physician practices as they transition to patient-centered care. Ray Saputelli, executive vice president of NJAFP, said the first-year results from Medicare “have demonstrated that, when a primary care physician is partnering with their patient to coordinate that patient’s care, to help the patient along their health care journey, to put the patient at the center of the health care team — we are now clearly seeing evidence that costs are reduced or at least contained, that outcomes tend to improve and that health tends to improve.” And he said that, when all those things happen, “the physicians and the clinicians on the team tend to see their satisfaction with the process improve as well.” He said the academy has been working for the past seven years helping physicians transform their practices: “One of the things we have learned is that a lot of this work is difficult and time consuming and resource intensive. So there is going to need to be continued attention paid to ensuring that, as we change the payment model, that the payments keep up with the level of resources required to do this kind of work.” Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute, said: “I think that the study results show that CPC does work to provide better care to patients with greater health care needs. Moreover, the programs that are the most successful are the ones where there is deep collaboration between the payers and the health care providers and where not only payment incentives are made, but where data is shared on a timely basis so that physicians engage with their patients get them the right care in the appropriate setting. It’s not just about payments — it’s also about empowering physicians and patients to get the best results for the patient over time.” The Rutgers Center for State Health Policy is the multi-stakeholder convener for CPC in New Jersey. Margaret Koller, executive director of the center, said: “We were very pleased to see the data and the initial positive results outlined in the Mathematica report. We will continue to facilitate engagement with the primary care practices, payers (including CMS) and other stakeholder groups in New Jersey to build on this momentum. We look forward to using the multi-stakeholder convening opportunities to identify strategies to sustain these transformation efforts and improve care for these patients.”
January 2015 7
Hospital Rounds
Hackensack University Health Network, Seton Hall to create medical school on former Roche campus By Tom Bergeron
H
ackensack University Health Network and Seton Hall University will announce Thursday that they have signed a memorandum of understanding to start a private four-year school of medicine to be located on the campus of the former Roche headquarters in North Jersey. The medical school will be the anchor tenant of the 119-acre property that resides on Route 3 and straddles Nutley and Clifton with a view of New York City. It is approximately 5 miles from both Hackensack and Seton Hall. The organizers of the project aim to make the school a conduit for a world-class research facility that will attract researchers and pharmaceutical companies of all sizes to the campus.
“We take a different perspective (in higher education),” he said. “It’s not about now, but how it will impact things many years in the future. This will do that.” Both Garrett and Esteban praised Roche for its desire to help New Jersey move forward. The company, which announced in June 2012 that it was pulling out of New Jersey, pushed to have the facility used for health care and has worked extensively on the deal, including providing all of the extensive remediation on the site. “They have been a great corporate citizen,” Garrett said. “They wanted to ensure their legacy in New Jersey and they are doing just that. I can’t say enough about them.”
The goal is to have the first class of approximately 125 to 150 students enter in the fall of 2017; the official name of the institution is still to be determined.
While this would be the state’s first private medical school, there are four public ones: two associated with Rutgers University and two with Rowan University.
It is too soon to know just how many jobs will be created because of the vast scope of the project, but Hackensack and Seton Hall officials said the school alone could create 400 to 500 jobs. And hundreds of other jobs could be created through the other outlets on the campus, both said.
Gov. Chris Christie will be the keynote speaker at Thursday’s announcement, which is scheduled to begin at 10 a.m. at the Roche campus.
The developer of the project, to be selected by Roche, has not been announced, but those same officials said it has been made clear by Roche that the medical school will get favorable lease terms as well as a large say in how the rest of the campus is developed. That being said, Hackensack and Seton Hall, which will share all capital costs 50-50, figure to invest “hundreds of millions of dollars in the first 10 years” to get things going, Hackensack officials said. Hackensack CEO Robert C. Garrett calls the project “transformational.” “It’s a game-changer,” he said. “Not just for Hackensack, but for the state of New Jersey to have this sort of project that will create several hundred jobs and spur economic development.” Seton Hall President Dr. A. Gabriel Esteban says it is momentous. 8 New Jersey Physician
Details of the project are still emerging, but here is what is known: The school will offer programs in numerous disciplines, but will have an emphasis on producing doctors in areas of acute need (primary care, general surgery, OB/GYN) in an effort to combat the projected shortfall of doctors in New Jersey and around the country. “There is a way to deal with this shortfall,” Garrett said. “Statistically, where there are schools, physicians stay and practice. And in this school the curriculum is going to be geared toward areas where we have an acute shortage. We’re not going to exclusively focus on those areas, but we will focus on those areas and emphasize them.” Physicians and other health officials from the announced merger of Hackensack-Meridian Health Network will be a large part of the faculty. And while Hackensack University Medical Center figures to be the most heavily represented (due to its size and proximity to the location), officials from all 11 of the hospitals in the still-being-approved merger will be used. All 11 entities will become teaching hospitals.
Seton Hall is working on plans to relocate its School of Nursing and its School of Applied Medical Sciences to the facility. This includes its programs in Physician Assistance, Athletic Training, Occupational Therapy, Physical Therapy, Speech and Language Pathology along with a Master’s in Health Administration and a Ph.D. in Health Sciences (research). The move, still being worked on, would open up more space on the school’s main South Orange campus and also open up more room in its programs. “If I had the space, I could increase enrollment in our allied health programs by 20 percent without any dip in the level of admissions,” Esteban said. Creating a world-class research facility is a main goal — one made possible by the millions of dollars of state-of-the-art and ready-to-go research rooms already on the campus, thanks to Roche’s more than 80 years at the site. “This is a piece that is very exciting,” Esteban said. “The labs are first-class. “The first time I saw them I thought, ‘For me to build this, it would take a lot of zeros.’” Garrett said he is hopeful both big and little pharma companies in the state will be encouraged to participate and collaborate. And he would welcome working with more universities, as well, noting Hackensack already collaborates in research with Georgetown, a school he indicated would have interest in relocating some researchers to the area. “This facility and this plan can really attract top researchers; that’s the other piece,” Garrett said. “It’s not just about attracting great physicians and having a great medical school with first-rate medical students, but actually attracting researchers from other states — maybe from across the river in the New York, maybe from Philadelphia — to New Jersey. “They would have the platform, the facility and the university stature they would be looking for to make a move and set up camp right here in our state.” The actual medical school will take up only 14 acres of the 119-acre campus. But as the anchor tenant, representatives from Hackensack and Seton Hall will have a strong say in how the rest of the space is developed.
In addition to creating space for research, parts of the property likely will be developed for housing and a hotel as well as some small retail. In other words, everything people will need to work, study and live will be on the site or nearby — a huge plus for the area. “There is certainly going to be a huge spillover effect for businesses in Nutley and Clifton and for all of Essex County,” Esteban said. Thursday’s announcement is just the latest step in a long process that began years ago, when Garrett and Esteban began working on plans to add a medical school to their organizations — though each unaware of the other’s plans at the time. Next up? All parties involved will complete their due diligence before signing a definitive agreement, potentially in the spring. Then, while construction to retrofit the existing facilities and potentially build some others, the groups will work to obtain the necessary accreditations to open a school — a process that figures to last at least a year, into summer 2016. At the same time, the parties involved will be working on setting up the logistics of the school: hiring a dean and a preclinical faculty, developing a curriculum and all things associated with student life, including selecting the first class. And, of course, there are still the money issues to work out. The project would seemingly fall in line with requirements for incentives from the EDA. In addition, Garrett said the group expects to find friendly assistance from the towns of Nutley and Clifton. “We’ll remind the mayors that we need their help in terms of attractive tax structure to get the deal done,” he said. But what a deal, Garrett said, this will be for New Jersey. “All the news has been ‘This company’s leaving, that company’s leaving,’” he said. “This is a great story in that it’s a redevelopment of a huge parcel of land and we’re attracting new services and new jobs to the area.”
January 2015 9
Insurance Issues
Use of Horizon BCBSNJ’s ‘patient-centered’ programs up more than 50 percent By Beth Fitzgerald
H
orizon Blue Cross Blue Shield of New Jersey on Thursday announced a new milestone for its “patient-centered” programs: More than 750,000 Horizon members now receive care from doctors in the Horizon patient-centered network, up from about 500,000 a year ago. Patient-centered practices are those in which Horizon works closely with the doctors to better coordinate medical care, reduce unnecessary costs and improve the patient experience. Horizon said more than 6,000 doctors throughout New Jersey now participate in its patient-centered programs, making this the largest patient-centered doctor network in the state. “Horizon is committed to transforming how health care is delivered in New Jersey,” said Robert A. Marino, chief executive of Horizon. “With this expansion, we continue to lead this effort with innovative doctors across this state. We will continue to expand our patient-centered programs so that more of our members benefit from more coordinated and efficient patient care.” Horizon said an analysis of 2013 claims data demonstrates the impact of patient-centered care on quality and cost. Comparing outcomes for more than 200,000 Horizon members in patient-centered practices with outcomes of members in traditional primary care practices, the study found: • 14 percent higher rate in improved diabetes control.
• 4 percent lower rate in emergency room visits. • 2 percent lower rate in hospital admissions. • 4 percent lower cost of care for diabetic patients. • 4 percent lower total cost of care. “Horizon’s patient-centered programs are working to lower costs and improve health outcomes,” said Jim Albano, vice president of network management and Horizon Healthcare Innovations. “We are pleased with the results, and this program demonstrates how we can work with innovative doctors, hospitals, nurses, care teams, and make great strides toward delivering better care at a lower cost.” Patient-centered care refers to an innovative approach in which health insurance companies provide incentives to doctors to meet certain clinical quality, patient satisfaction and efficiency benchmarks. Unlike the traditional fee-for-service model, patient-centered practices are financially rewarded to improve the patient experience and improve patient care based upon national clinical guidelines. • Patient-centered practices provide patients with more coordinated and personalized care, including: • A care coordinator who provides additional patient support, information and outreach.
• 12 percent higher rate in cholesterol management.
• Wellness and preventive care based on national clinical guidelines.
• 8 percent higher rate in breast cancer screenings.
• Extra wellness support and education.
• 6 percent higher rate in colorectal cancer screenings.
• Active patient monitoring and communication from the doctor and care coordinator.
Horizon said the results show that more active medical care can be provided at a lower cost; Horizon members in patient-centered practices had: 10 New Jersey Physician
• Active coordination of a patient’s care with specialists and other providers
Hospital Rounds
Survey paints bleak picture for physicians amid health care changes By Beth Fitzgerald
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ew Jersey physicians are under stress from the rapidly changing health care environment, and the majority are considering changes to their practice structure, such as merging with a hospital or another practice, according to a new survey. The third annual New Jersey Health Care Monitor survey by the law firm Brach Eichler, conducted last November and December, found that nearly 90 percent of respondents believe the health care environment has negatively impacted their role as a physician. Of those, more than 86 percent report increased administrative burdens, while more than 60 percent are spending less time with patients and more money on technology. The majority of physicians reported changes in their reimbursement levels, with some saying their compensation has increased, while others are earning less as health care reform transforms their profession. The statewide survey received responses from 100 physicians, including solo practitioners, members of a group practice or physicians employed by a health care facility. John D. Fanburg, chair of the health law practice at Brach Eichler, advises physicians, hospitals and other health care providers during merger transactions, and said he’s not surprised by the survey results. “What we’ve seen in the transactional area is a lot of activity, a lot of frustration and fear,” Fanburg said. “We have doctors doing one of four things: selling their practice to a hospital; joining a large multispecialty group, joining or forming a single specialty group” or making no changes and instead “just
trying to ride it out until the next phase of health care reform or economics kicks in.” Fanburg said it’s significant that 53 percent of respondents are considering changing their practice structure; that is up from 45.5 percent in the 2013 survey. He said more physicians are considering a transaction because they know other physicians who have taken this step. “I had one physician group that was interested in joining a hospital and they said, ‘Such and such group did it last year and they seem to be okay with it.’ So as more of the physicians’ colleagues do these transactions, they are more comfortable doing it, too — as opposed to five years ago, when no one was doing this.” But Fanburg said he’s had a few cases where merging a doctor practice into a hospital didn’t work out, and he’s helped terminate the relationship. In some cases, physicians don’t see the reduced administrative burdens or stable compensation they had hoped for. “At the same time, in some cases maybe the hospital jumped too soon,” Fanburg said. “There is this huge turf war going on in terms of capturing as many physicians as possible while they’re still in play. At some point every (physician) worth getting will be gone and then the hospitals and the big groups have to decide, ‘Did we bet on the right people?’” Fanburg said he is hearing success stories from physicians, post-merger, who are enjoying reduced administrative burdens after joining a larger organization. Others, however, miss the autonomy they left behind.
Adopting electronic medical records has been a significant challenge for some practices, Fanburg said. And while the federal government has provided financial incentives to smooth the transition, “I still have lots of clients who are just never going to adopt electronic medical records,” he said. In some cases, the physician is nearing retirement and when weighing the cost “in light of how much longer they have to practice, they don’t feel it’s going to be worth it to them.” Larger practices, however, accept health IT as a normal, mandatory expense. Joel Cantor, director of the Rutgers Center for State Health Policy, said the survey’s 100 responses is a fairly small number from which to extrapolate to how all doctors feel, and said he’s not familiar with the survey’s methodology. But, Cantor said, “In general, physician studies in recent years have come to similar conclusions: that practicing medicine has gotten more difficult, with payment rates not keeping up with practice expenses, more red tape, more pressure to increase volume.” Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute, said, “The results are interesting and are evidence of just how hard it is to transform health care.” Schwimmer added: “We are at a turbulent time in health care and physicians are in the bull’s-eye of the change. But change brings opportunity and prospects for real improvement.” She noted that practices need to invest in electronic systems, “but this has been true for many fields for the last 20 years. Medicine, frankly, is playing catch-up.”
— Cont’d
January 2015 11
Hospital Rounds The survey found that nearly 40 percent of respondents have an unfavorable or very unfavorable outlook for their medical practice in 2015, while only about 23 percent reported a favorable outlook. No respondent reported a very favorable view for 2015. These findings are less optimistic than last year’s survey, when 38 percent had an unfavorable view and more than 26 percent reported a favorable outlook. Among the survey’s other findings: Of the 44 percent who reported changing their practice structure in 2014, 42 percent hired other practitioners, 39 percent integrated their practice with another health care organization and nearly 13 percent retired. Only about 3 percent said their income increased substantially in 2014 over 2013, while nearly 38 percent said it decreased substantially and nearly 60 percent said it remained the same. The survey found that nearly 29 percent of respondents now belong to Accountable Care Organizations, which provide financial incentives to improve quality and lower costs. Only 5 percent report any benefits from membership in an ACO. The survey also found that the “patient-centered medical home” model, in which health care providers coordinate pa-
12 New Jersey Physician
tient care and focus on improved population health, at not the norm in New Jersey, with just over 10 percent reporting that they had been approached to enter into a contract with a medical home. Fanburg said the PCMH model is still in its early stages, and is not yet well understood by physicians. But he said it would help doctors to move toward the PCMH model, in which “You’re really trying to be proactive and not only help the patient get healthy, but stay healthy, and coordinating care with your colleagues.” He noted that traditionally, patients have received care from multiple doctors who may not have been aware of what the other doctors were doing. “That type of health care system is not sustainable nor is it good for the patient.” Schwimmer of the New Jersey Health Care Quality Institute said, “The shift to patient-centered care and the accountable care models holds real promise to improve physician-patient communications, to engage in ‘shared decision-making’ where physicians and their staff have the time to discuss and understand their patients’ goals for care and health and then suggest next steps in that context including when that test, drug or procedure may not be medically necessary or good for the patient, given their goals.”
Hospital Rounds
More N.J. health care organizations to start ACOs, get chance at Medicare incentives By Beth Fitzgerald
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wo New Jersey health care systems, Capital Health and Inspira Health Network, are among six health care organizations serving New Jersey and 89 nationwide chosen by Medicare to join its Accountable Care Organization program, where health care providers can get financial rewards for improving the quality of care while also cutting out wasted spending. The new, three-year ACOs launching this month join the 11 New Jersey ACOs that began in 2012 and 2013. To date, three have generated financial savings for Medicare: Hackensack Physician-Hospital Alliance; Meridian ACO; and Optimus Healthcare Partners. The federal government announced last September that, so far, Optimus has saved Medicare $17.03 million and will receive a shared savings payment from the government of $8.34 million; Meridian saved Medicare $14.89 million and will receive $7.30 million; and Hackensack saved $10.75 million and will receive $5.27 million. Jim Boote, vice president of provider network integration for Inspira, is overseeing the rollout of the ACO. He said the ACO will be physician-led, and he said 100 physicians have signed up to be part of the ACO and work in partnership with Inspira, whose three hospitals in southern New Jersey are in Woodbury, Vineland and Elmer. Boote said the ACO will look to provide better-coordinated medical care to the 11,000 Medicare patients assigned by
the government to the Inspira ACO.
of the people who are part of this ACO.”
He explained that the ACO will receive data from Medicare about the medical care these patients are now receiving, with the goal of providing care that is more clinically coordinated and less fragmented care.
Jeff Brown of the New Jersey Health Care Quality Institute said: “Accountable Care Organizations are one important way that our health care system is changing, and this news is promising, and proof that payment reform is here to stay. By stressing quality improvement, data analysis, patient engagement and the importance of creating value, i.e. health, instead of volume, ACOs possess the potential to deliver higher quality care at a lower cost. We’re seeing such potential firsthand via our ACO learning network, where organizations like Inspira share best practices, innovations and the great work that they’re undertaking to ultimately improve patient experience and population health.
“We will be able to understand some of the different medications they are getting from other physicians, and if they are in a skilled nursing facility, what care they are receiving there,” he said. “If they’ve gotten MRI or radiology tests, we’ll be able to get hold of that information. We are going to be able, in my mind, to improve the care for each one of those people.” He said providing better care to Medicare patients can leading to financial savings for the government. “For example, if a person had an MRI done six months ago and then they have a second one done because another physician was not aware of the first one — it might not have been necessary to do the test twice. Hopefully, we will be able to bring information together so that sort of duplication doesn’t happen.” Boote said that, by getting data from Medicare, the ACO will have a fuller picture of the care that patients are getting throughout the health care system. He said that, currently, patients may be seeing multiple physicians without having their care coordinated: “We really want to be able to improve the health
“Congratulations to Inspira and the others for taking a big step toward building a more sustainable, more data-driven, patient-centered health system.” Along with Inspira and Capital Health, which will serve Medicare patients in New Jersey and Pennsylvania, Medicare announced four new ACOs that will start serving New Jersey patients in 2015: Chrysalis Medical Services in Linwood, led by Dr. Anthanasios Papastamelos; New York Quality Care, which covers New Jersey and New York; Orange Accountable Care of New York, whose service area includes New Jersey, New York and Florida; and Quality Health Alliance, which covers New Jersey and Pennsylvania. January 2015 13
Hospital Rounds
AtlantiCare expands network of outpatient surgery centers By Beth Fitzgerald
W
ith the opening last week of its third outpatient surgery center, AtlantiCare now offers same-day surgery in Ocean, Atlantic and Cape May counties and can provide this lower-cost option closer to where patients live.
Melissa Bushnell, executive director of AtlantiCare Surgery Centers, said the new center in Little Egg Harbor, Ocean County, is the former Sea Oaks Surgery Center, which was acquired by AtlantiCare. A major southern New Jersey health system with its flagship regional medical center in Atlantic City and Pomona, AtlantiCare in 1997 opened its first surgery center in Egg Harbor Township, which did more than 17,000 procedures last year. The second one in Cape May Court House, acquired in 2009, did more than 4,000 procedures last year. The new one in Little Egg Harbor did about 1,400 procedures last year, but that is expected to grow. Bushnell said only a handful of surgeons had been using that center, while going forward all 125 surgeons affiliated with AtlantiCare’s surgery centers will be able to do same-day surgery in all three locations. “Now we can provide convenience, safety and a cost-effective surgical model to our patients in all three counties,” Bushnell said. Health care experts say that same-day surgeries, which don’t require an overnight hospital stay, are generally less expensive than surgery done in a hospital. And cost has become a more critical factor in recent years, as more people enroll in high-deductible health plans that require patients to pay a higher share of the medical bill. Bushnell said that, while deciding where to locate a new center, AtlantiCare did an analysis and found that, last year, about 1,300 patients from Ocean County came to AtlantiCare’s Atlantic County surgery center. “We felt by bringing our surgery center to Ocean County, patients would have the convenience of having their surgical procedures done closer to their homes,” she said. Ambulatory surgery centers play a major role in health care delivery in New Jersey. There are about 285 ASCs in New Jersey, and they perform an estimated 1 million procedures a year, according to the New Jersey Association of Ambulatory Surgery Centers. Cost and reimbursements vary among different ASCs and different health plans. According to the NJAASC, Medicare pays ambulatory surgery centers about 53 percent of what it pays for the same procedure in a hospital outpatient department. A hospital stay is required for major operations such as cardiac surgery and full joint replacement, but a wide variety of procedures are done in surgery centers, including cataract and other ophthalmology procedures; pain management; tonsillectomies and sinus surgeries; and various orthopedic procedures.
14 New Jersey Physician
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January 2015 15
Hospital Rounds
N.J. hospitals contribute $20B to state’s economy, report says By Beth Fitzgerald
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ew Jersey’s hospitals remain among the state’s economic powerhouses, with 2013 revenue of $20.2 billion, according to a new report by the New Jersey Hospital Association. But the report, “Financial Status of New Jersey Hospitals” also revealed that 36 percent of New Jersey hospitals ended 2013 with a loss. And overall, the operating margin for the state’s hospital sector declined slightly to 2.82 percent in 2013, from 2.83 percent in 2012. In 2011, the hospital margin averaged 3.08 percent. Betsy Ryan, chief executive of the NJHA, said, “The data shows the continued operational challenges New Jersey hospitals are facing. While they’re working hard to improve quality of care and efficiency of care, hospitals are still confronted with Medicare cuts under the Affordable Care Act, additional Medicare sequestration cuts, a significant reimbursement shortfall in Medicaid and other reimbursement pressures that never seem to ease. Those pressures also include an increase in unpaid care due to higher co-pays and deductibles in both the commercial market and under the ACA and caring for over a half-million undocumented immigrants.” According to the report, in 2013 there were 17 New Jersey hospitals that had a loss on their operations, meaning the total expenses were greater than total revenue. The hospital margin, or the percentage by which income exceeds expenses, varied in 2013 by a number of factors, including size and geography. The average margin was 2.82 percent for the entire sector. Inner city hospitals had an average loss of 0.9 percent, compared to positive average margins of 4.6 percent for urban hospitals, 2.3 percent for suburban hospitals and 0.3 percent for rural hospitals. According to the report, hospitals with 400 to 499 beds had the highest average margin, 4.3 percent, versus 2 percent for those with 500 beds or more and 0.6 percent for hospitals with fewer than 200 beds. Hospital admissions are declining, according to the report. Overall, New Jersey hospitals had 1.5 million admissions in 2013, down from 1.54 million in 2012; in 2009, that figure was 1.67 million. Expert point to major efforts by hospitals across the state to provide outpatient care whenever possible, and to provide better hospital-to-home transitional care to reduce the readmission of patients soon after discharge. Overall, New Jersey hospitals held about $7 billion in long term debt in 2013, down slightly from 2009, and had total assets of about $24.6 billion at the end of 2013.
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Hospital Rounds
Jersey Shore hospital names new president, a familiar face By Beth Fitzgerald
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ersey Shore University Medical Center, one of the largest hospitals in the state, has a new president: Dr. Kenneth N. Sable, who began his new job this week.
Sable comes to the 658-bed Jersey Shore from Saint Peter’s Healthcare System in New Brunswick, where for the past two years he was executive vice president and chief operating officer. At Jersey Shore he succeeds Steven G. Littleson, who in May was named executive vice president, Meridian Health, and president of Meridian Hospitals Corporation. “Ken is a proven leader, outstanding clinician, and a great fit for the Meridian Health family,” Littleton said. “And, after conducting a national search, we are lucky to have found a leader who lives right in Monroe Township and is familiar with Jersey Shore to serve as the hospital’s next president.”
Dr. Kenneth N. Sable
As Sable starts his new job at Jersey Shore, he is also marking his homecoming to the Neptune hospital. In 1997, as a medical student at nearby Robert Wood Johnson Medical School, Sable did rotations in pediatrics and neurology at Jersey Shore, the largest of the six hospitals in the Meridian Health system. Sable, 41, said much has changed since the late 1990s — at Meridian and in the health care landscape across New Jersey and the nation. He’s eager to lead Jersey Shore into the new era of population health management, in which health care providers take responsibility not just for curing the sick, but for keeping the community healthy. “We are learning how to thrive and survive and prosper in the new paradigm of health care delivery and health care reform, which is changing faster than many of us can keep up with,” Sable said. And he said the future “will revolve around population health. And that is basically being able to deploy our health care delivery system to better serve the community and keep populations healthy — as opposed to the traditional hospital, where we’re taking care of sick people. That is a change in focus for health care and we want to be in the forefront of leading that effort.” Littleson had led Jersey Shore since 1997, and he was running the hospital back when Sable was a medical student at Robert Wood Johnson Medical School, now part of Rutgers University. While doing clinical rotations at Jersey Shore, Sable roomed with other med students “in a dormitory at the far back corner of the hospital,” he recalled “Those have since come down and there are new buildings in that location. Today, this is a much different campus — it is like night and day.” In 2009, Jersey Shore completed the $300 million renovation, including 400,000 square feet of new space, which added 108 new beds, a new emergency department, six operating rooms, a 950-space parking garage and a new central utility plant with cogeneration. The project was certified as a LEED Gold health care facility. — Cont’d
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Hospital Rounds
Sable said that, as health care undergoes transformational change, his mission will be to keep Jersey Shore focused on “providing phenomenal patient care.” He cited Jersey Shore’s designation as a Magnet hospital for nursing, an elite award earned by hospitals that excel at patient care. “It takes complete dedication and support from the administration all the way down to achieve and maintain that level of nursing care,” he said. Health care systems are moving away from the traditional “fee-for-service” compensation model, toward one that rewards health care providers that deliver care that is both high quality and cost-effective. While the switch to the new paradigm remains a work in progress, “I don’t think it will be too far in the future,” Sable said. “We are already starting to see value-based purchasing on the governmental side (by Medicare) and more and more commercial payers are moving into that world as well. So we have to learn how to manage risk and be able to deal with that appropriately before we can fully transition away from a fee-for-service to a value-based purchasing model.” Meanwhile, Meridian is poised for major systemwide change: last October, Meridian and Hackensack University Health Network announced a merger that will forge the state’s largest health care system, with $3.44 billion in revenue. Meridian had earlier announced a merger with Raritan Bay Medical Center. Sable said the mergers “will give more stability to the system and allow for the development of more comprehensive services to patients. We can scale our services across more communities and share best practices.” He said Meridian, Hackensack and Raritan Bay all “bring best practice to the table; there will be a real opportunity for information sharing to help us all do a better job at delivering health care in what is really a new environment.” As a physician, Sable has an acute interest in Jersey Shore’s role as an academic medical center. Jersey Shore has 103 resident positions, in medicine, obstetrics and gynecology, pediatrics, podiatry, dentistry, pharmacy and sports medicine. “As someone who went through resident training, I think (Meridian) recognized in recruiting me and bringing me on board that my background and knowledge will be extremely valuable for maintaining and further growing the academic enterprise here at the Jersey Shore campus,” Sable said. Sable did his residency in emergency medicine at Cooper University Medical Center in Camden, and has an MBA from the University of Massachusetts; he earned his undergraduate degree in computer science and engineering at the University of Pennsylvania. At Saint Peter’s, Sable led the renovation of the hospital’s 26,000-square-foot emergency department, and renewed the hospital’s academic relationship with Rutgers Robert Wood Johnson Medical School. Prior to joining Saint Peter’s Sable spent a decade at Maimonides Medical Center in Brooklyn.
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Hospital Rounds
Barnabas Health purchases Jersey City-owned property for $24M By Beth Fitzgerald Jersey City Mayor Steven Fulop announced Wednesday that his administration has sold city-owned property at Grand Street and Jersey Avenue to Barnabas Health for $24 million, which he said is more than double what prior administrations had sought for the site. Fulop said Barnabas will develop the site as an expansion of its Jersey City Medical Center campus. “This is major progress at this site as the city was receiving no benefit from this land until the current administration became involved to properly capitalize on its value,” said Fulop. “We saw the opportunity to elevate the worth and find redevelopers in Barnabas Health who fit into the vision of what we are building in Jersey City — a world-class city with increased public and private assets that will benefit all of our residents.” “We look forward to working with Mayor Fulop and the JCRA on fostering this vision of a complete campus that supports the development and residential growth of Jersey City,” Joseph F. Scott, chief executive of Jersey City Medical CenterBarnabas Health, said. He said the hospital “continues to grow in patient volume, services provided and affiliated physicians. In addition to
our growth, Jersey City continues to attract new corporations, businesses and residents. We are looking for space for future expansion of the campus to better serve the needs of Jersey City and the greater Hudson County community, which will include support space such as additional areas for visitor and staff parking.” In a statement, Jersey City said the property, located behind the Jersey City Medical Center, has been owned by the city since 1997 and has sat undeveloped for nearly 20 years. Prior administrations had considered it as a location for a City Hall Annex or for private development with anticipated revenue of about $10 million. Recognizing the land held a much greater value, Fulop said his administration and the Jersey City Redevelopment Agency issued an RFP for the site in late 2013. At a Dec. 16, 2014, meeting, the JCRA board approved Barnabas Health as the redeveloper of the site, with Barnabas agreeing to pay $24 million for the property. The site will be part of an expanded health care campus to include medical offices, mixed-use development and parking. Final plans for the site must be approved by the Barnabas board, the JCRA, the Planning Board and the City Council.
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Insurance Issues
Cigna buying QualCare; Catino, who will remain CEO, explains deal By Beth Fitzgerald “Health care is changing, and there are payer/provider partnerships going all over the country,” Catino said. “We needed the ability to be able to do more of those partnerships, with strong financial backing.” She said that, as consumers increasingly are making their own health-plan buying decisions — including on the HealthCare.gov site under the Affordable Care Act — QualCare needed to be able to offer insured health plans. She said the deal “really is about growing New Jersey and supporting Cigna in their growth in other parts of the country with a New Jersey infrastructure.”
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he health insurer Cigna will purchase the Piscatawaybased health-plan provider QualCare Alliance Networks in a deal the two partners said means growth for QualCare and more jobs for New Jersey. QualCare founder Annette Catino, who will remain chief executive, said, “This is a big deal for New Jersey and for QualCare.” Lt. Gov. Kim Guadagno came to QualCare Monday morning for the announcement, along with John Wray, senior vice president of Cigna, which now has about a half-million members in New Jersey. Terms of the deal were not disclosed, but the transaction is expected to close in the first quarter of 2015, following regulatory approvals. Cigna said the agreement combines Cigna’s portfolio of health-related products and services and national scale with QualCare’s expertise and capabilities in working with hospital systems to drive innovation, affordability and value. QualCare serves about 200,000 customers in self-funded health plans and has more than 900,000 customer relationships, including network access arrangements for workers’ compensation and other products. It is owned by 16 nonprofit hospitals and physician-hospital organizations, with a clientele that spans health systems, unions, local governments, school boards and other commercial employers. QualCare has grown by providing self-insured health plans to employers, including a number of New Jersey hospital systems, and Catino said the company needed to partner with an insurer in order to expand by offering insured health plans as well as self-insured products. 20 New Jersey Physician
QualCare now has about 800 employees and Catino said the number will grow through the partnership with Cigna. “Our plans for growth include launching new health insurance products here in New Jersey,” she said. “But our growth plans also include taking the products that we have built here in New Jersey and replicating them in other parts of the country using our platform.” Cigna is a Fortune 100 company that does business in all 50 states and operates internationally. “This will allow New Jersey to have a more competitive (health plan) environment here in the state,” Catino said. She said Cigna “is committed to the expertise and the entrepreneurial spirit that we have built here in New Jersey, and would like to replicate that in other parts of the country.” She said jobs at QualCare in New Jersey will grow, “because we are going to hire significantly in the technology area to be able to replicate what we have done in New Jersey in other parts of the country. This will be very good for technology jobs in New Jersey.” QualCare provides its network to two insurance companies that sell plans on the ACA’s HealthCare.gov exchange: Health Republic Insurance of New Jersey and Oscar Insurance. Asked if that will continue when QualCare becomes part of Cigna, Catino told NJBIZ, “Yes, absolutely.” “The era of providers relying on volume of care and illness is over. The future is one of serving local communities and focusing on wellness,” said John K. Lloyd, chairman of the board of QualCare and CEO of Meridian Health. “Today’s decision will ensure QualCare’s success in this changing environment and enhance the value it can bring to its local communities.”
“Cigna’s goal is to deliver affordable health care solutions that provide greater value and better health outcomes and experience for our customers,” said Matt Manders, president of U.S. commercial markets and global health care operations for Cigna. “This acquisition is an example of Cigna’s ongoing commitment to being a partner of choice to health care professionals and hospital systems. It demonstrates our focus on partnering with systems and physician groups to deliver next generation health care models.”
tween those two interests. We can really bring together the capabilities that we have and the capabilities that are evolving on the delivery system side to meet the demands that the consumers are putting on the market right now.”
John Wray, senior vice president of network contracting and delivery system collaboration for Cigna, said the deal “is a really unique opportunity for us to expand our ability and understanding of how to work more closely and effectively with the people who actually deliver the care to the customers — hospital and doctors.”
Wray said the merger “is a very good thing for New Jersey. We will continue to have QualCare based in New Jersey and we are going to provide opportunities for people outside of the state to capitalize on the talent and capabilities that are housed in New Jersey.”
He said that, for years, QualCare has been creating health plans that focus on the quality and efficiency of care, as the health care system moves away from the old fee-for-service model that many experts blame for much of the rising cost of health care over the years in the U.S. He noted that QualCare was created by several large hospital systems in New Jersey: “So it’s really in their DNA to know how to work with hospital systems. Rather than looking from the outside looking in, hey, have an internal point of view. They have an understanding of how the hospitals themselves do business and that really gives them a perspective that few people have.” Wray said: “The traditional ways of doing business, where providers of care were more inclined to do more from a volume perspective, is shifting more to a value perspective and QualCare has done that really effectively. And that will enhance Cigna’s ability to do that more effectively with the hospital systems as well.” He also said consumers are “are looking more and more for choice, personalization and affordability. And on the supply side, the delivery system, the hospitals and the physicians, they are evolving at the same time. They are looking for ways to be more responsive to those demands.”
He pointed that Cigna has a lot of expertise in areas like pharmacy, behavioral health and consumer engagement, “where individuals are able to take more accountability and control over their own health care decisions.”
The deal was welcomed by John Sarno, president of the Employers Association of New Jersey, whose member employers can join a self-insured health plan managed by QualCare, the Affiliated Physicians and Employers Heath Plan. Sarno said “the synergies of this deal will create great value” for the health plan. “We will have the same great provider network and administrative capacities for New Jersey employers, but we will now have national reach and the resources to consider other options for employers, such as a private health care exchange and other consumer-directed platforms.” Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute, said the deal “has the potential to be disruptive to the marketplace, but that could be in a positive way.” She said the institute has seen quality improve with increased transparency, and she said Cigna is a big supporter of the Leapfrog Group, which rates hospitals based on their performance on patient safety, “and that’s a good sign.” Joel Cantor, director of the Rutgers Center for State Health Policy, said, «This partnership could signal increased competition in New Jersey’s health insurance markets by joining Cigna, a strong national player, with QualCare, a strong local plan.»
So what the QualCare merger bring to Cigna is, “It really jump-starts our ability at Cigna to play a convening role be-
January 2015 21
Princeton’s Premier Senior Health Campus The Pavilions at Forrestal campus features two comprehensive centers that combine to deliver unparalleled senior care services. Our campus is home to post acute care and assisted living centers. Both offer a variety of on-site amenities and services specially designed to meet the needs of patients, residents and their family members. The Pavilions at Forrestal provides post acute, long term, Alzheimer’s / dementia and hospice care as well as rehabilitation and respite care, all under one roof. We offer state-of-the-art programs for physical, occupational, speech, respiratory and other therapies and our staff of licensed therapists is available seven days a week. Innovative supervised recreational activities in art, music, crafts and our exercise programs encourage social interaction and significantly enhance patients’ rehabilitation and quality of life. The Pavilions at Forrestal Assisted Living offers the independence of a private apartment and all the comforts of home with a host of convenient amenities and hospitality services. Residents enjoy delicious meals in a restaurant-style dining room, energizing fitness and wellness programs and a diverse range of cultural and social activities. The center also offers concierge service, weekly housekeeping services, courtesy van transportation, and much more. We take great pride in the care we deliver at both centers and our compassionate, experienced staff is focused on creating a warm environment that supports healing.
Pavilions at Forrestal Care Center
Pavilions at Forrestal Assisted Living
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www.atriumhealthusa.com 22 New Jersey Physician
Hospital Rounds
Jersey City hospital on verge of exiting Horizon BCBSNJ network By Beth Fitzgerald
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ew Jersey’s largest health insurer, Horizon Blue Cross Blue Shield of New Jersey, announced Tuesday that Christ Hospital in Jersey City, owned by the for-profit CarePoint Health, has terminated its relationship with Horizon and will exit the insurer’s network June 1. Horizon said it couldn’t agree on reimbursement rates with Christ Hospital — but the two sides could still reach a deal. “We are hopeful that the owners of Christ Hospital will meet with us to negotiate in good faith and decide to return to the family of Horizon network hospitals,” Robert A. Marino, chief executive of Horizon, said in a statement. Dennis Kelly, chief executive of CarePoint, said, “I share Mr. Marino’s disappointment in the fact that we’re not yet able to reach an agreement with Horizon for CarePoint Christ Hospital to deliver high-quality, accessible care to Horizon members at this location.” Kelly added, “I am confident that the ongoing discussions will result in an agreement by the May 31 deadline.” Kelly pointed out that CarePoint’s two other hospitals, Bayonne Medical Center and Hoboken University Medical Center, remain in the Horizon network. He said the Christ Hospital issue “has no impact on Horizon patients at our other two hospitals.” All three CarePoint hospitals are in Hudson County. Horizon has more than 3.7 million members and said its hospital network currently includes 62 of the state’s 64 hospitals. The two hospitals now outside the Horizon network are Palisades Medical Center in North Bergen and Bergen Regional Medical Center in Paramus; if Christ Hospital leaves on June 1, that will make three. Under New Jersey law, health insurers and patients can face extraordinarily high hospital bills if patients seek care — especially emergency room care — at out-of-network hospitals. Hearings were held last fall in Trenton on whether to regulate out-of-network hospital charges; legislation is not yet being considered. Horizon said last year it paid more than $1 billion in out-ofnetwork costs.
Horizon said out-of-network hospitals “generally charge members rates well above those agreed to by network hospitals.” Horizon said New Jersey law does not regulate what out-ofnetwork hospitals can charge for patient care. Under state regulations, insured individuals who receive emergency care at out-of-network hospitals are only responsible for paying what they would owe if they had gone to a network hospital. Insurance companies generally must pay the balance, Horizon said. Horizon said it is sending notices to its more than 146,000 members in the Hudson County area advising them that Christ Hospital is leaving its network. Horizon said that, because Christ Hospital will be an out-of-network provider, Horizon members will face higher out-of pocket costs if they use Christ Hospital after June 1. “The affordability of health care in New Jersey is a paramount concern of our members,” Marino said. “We strive to work with all New Jersey hospitals in order to provide our members with the best access to quality, affordable care, which is why we are disappointed by CarePoint’s decision to have Christ Hospital leave our hospital network. We believe in establishing fair and reasonable rates with hospitals for the quality health care services they provide to our members.” Horizon negotiates rates with its in-network hospitals and said that, when its members use in-network hospitals, they generally have lower out-of-pocket costs because of the lower rates agreed to by those hospitals. “Horizon works hard, on our members’ behalf, to negotiate reasonable and fair reimbursement rates with our network hospitals to keep health insurance affordable,” said Kevin Conlin, executive vice president of Health Care Management for Horizon. “Occasionally, as is the case with Christ Hospital, those negotiations are not successful. Therefore, Horizon has begun notifying our members in the area that seeking care at Christ Hospital after May 31 will mean higher out-of-pocket costs for them. We are also informing our local members about other affordable network hospitals available to them.” January 2015 23
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